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Lessons From Peter Drucker

How Drucker Can Make You a Better Manager

Cohen
Posted: 02/16/2017

Peter Drucker is known as “the Father of Modern Management.” He was certainly different than other management gurus.

And by the way, he didn’t like that description of his work. He preferred to be called a “social ecologist,” someone who studies how societies interact and organize themselves. But there is a little more to it.

Social ecology was a theory founded by Murray Bookchin. (Proving that the conservative Drucker harbored no prejudices, Bookchin was not only a socialist, he was an anarchist. 

Bookchin’s theory is based on a reconstructive, ecological, communitarian, and ethical approach to society. 

Maybe this is why Drucker’s approach to consulting was so different from other giants in the field. These differences start with Drucker’s emphasis on questioning clients rather than providing answers. 

The good news is any manager can adapt Drucker’s consulting methods to his or her own practice of management.

Drucker’s Untraditional Consulting

Drucker thought of himself as a scientist, even if he didn’t use the word to describe himself.

This mindset explains a lot. Like many scientists, he never coveted great wealth. Instead of billing his clients $10,000 a day, he required that they donate $10,000 a day to a foundation he founded. He lived in a modest house in Claremont, California. He drove a relatively inexpensive car. He mowed his own lawn. He didn’t wear pricey suits or expensive watches.

The Trials of Being a Drucker Client

Many people have said Drucker’s consulting style was the most difficult part about being his client. One Drucker client that I spoke with expressed it this way:

We were accustomed to hiring consultants and telling them what we wanted done or what problem we wanted solved.

They went off and returned after a time with mounds of data and reports, and—before the time of PowerPoint—stacks of overhead foils which presented their detailed solution and recommendations.

We were instructed what we needed to do to execute their recommendations.

Drucker, on the other hand, did none of that. He would begin by asking us questions which we were expected to answer. In the process, we had to logically think through answers, and along the way, we generated solutions which we would have otherwise overlooked.

The clients obviously learned a great deal in the process.

The Chinese philanthropist, Minglo Shao, told me that every year he would visit Drucker multiple times, and Drucker would ask him questions about various issues regarding the development of his many businesses and foundations.

Just by asking him questions, Drucker opened Shao to new insights which guided him on what to do. Drucker never told him how to do anything.

Do the Most Difficult Thing—Think!

Although Drucker was well-aware of many innovative methodologies for analyzing business situations and developing strategies, he made almost no use of them. Instead, he emphasized thinking through every situation on its own.

He never taught Boston Consulting Group’s “portfolio analysis” with its famous quadrants of cash cows, shooting stars, problem children, and dogs, or the GE/McKinsey nine cell version, or any another version of management or business strategy by rote methods. And he developed few such gimmicks of his own. 

Beware of “Breakthrough” Systems

Drucker knew all about the new fads promoted as breakthroughs, but he was extremely cautious in applying them without much thought; that is, without thinking through each situation individually and considering whether it made sense to employ them.

When organizations joined the participatory management fad based on Douglas McGregor’s concept of Theory X verses Theory Y in the early 1960s, Drucker pointed out that McGregor was merely noting that Theory Y—management with significant participation of the managed—was an alternative to the more directive style practiced by most businesses at the time.  

Drucker discovered what almost all adopters of Theory Y missed: McGregor said his intent was to describe an alternative management style which might give better results under certain circumstances, and more research was needed to uncover exactly what these circumstances were.

McGregor wasn’t saying participatory management was the universal answer in all situations. Sometimes it makes sense for the manager to simply mandate: “Do this!”

Even Drucker’s friend and strong supporter, Warren Bennis, a distinguished management expert in his own right, failed to heed Drucker’s cautionary advice to not to adopt Theory Y as the answer for all management problems in all organizations.  

Bennis, then president of the University of Buffalo, embraced and adopted participatory management almost completely in a totally unsuitable environment. According to Drucker, “The result was tremendous excitement, but also total failure.”

This was one of Bennis’s few mistakes. It probably had one major benefit—it encouraged Bennis to return to his career as a leadership theorist, author, and teacher.

He wrote many books on this topic and founded the Leadership Institute at the University of Southern California. About his experience in applying Theory Y, he wrote: “In the end I wasn’t very good at being a president.” 

Feelings Are Frequently More Important Than Numbers

Drucker insisted on measures in just about everything, but he said the results should to be considered informational. He avoided decision making by numbers. 

Drucker maintained that computer-generated answers were still inferior to using the human brain, thinking through everything, and making a “gut” decision based on available information, personal experience, and knowledge of the personnel involved. 

He reminded his students and his clients that although a certain program might give accurate outcome results 92.5% of the time, for 7.5% of the time the results were 100% inaccurate. 

He recommended managers make gut decisions after considering all the information that could be obtained, so these gut decisions were really made with the brain. 

In the end, Drucker’s consulting practice was based on only three basic principles: 

  • Question everything
  • Use the brain, rather than formula or fad, as your primary aid
  • Gather all the information you can—including computer-generated data—but making your own decisions

*Adapted from Peter Drucker on Consulting: How to Apply Drucker’s Principles for Business Success  published by LID in 2016.

 

Cohen
Posted: 02/16/2017